Are you certain you’re getting the maximum revenue from your parking rates? Did you know that you can manage your rates to set the right price for the right parker at the right time? This strategy is called yield management and it is the same as that used by airlines, hotels, car rental – even Uber.
Yield management (or revenue management) begins with collecting customer data then using that data to track, study, and predict customer buying behavior. Here are four tips to effectively use yield management for your parking business:
1. Pricing Strategy: Fixed or Dynamic?
Fixed pricing is a set price based on a recurring situation, as in the case of theaters that use a fixed regular price and a fixed matinee price during slow afternoon hours. Also used in parking, operators can use fixed pricing for regular, holiday, special event rates, for example.
Dynamic pricing is flexible, based on real-time demand and inventory and adjusts pricing based on these important elements. This makes a parking operator’s pricing nimble particularly when the demand is high, or the lot is empty. Uber’s surge pricing, for example, charges riders premium pricing when the demand is highest. Dynamic pricing gives parking operators the ability to charge the right price at the right time.
It is important to understand the difference between fixed and dynamic pricing and how each can impact your parking revenue! We recommend a dynamic pricing strategy so that amidst slow periods you can attract additional customers with your low price, but during seasons of high demand you can gain the maximum profit attainable. This pricing strategy is best managed within a central reservation system where prices can be set to automatically adjust based on demand.
2. Parking Space Inventory
Another tip for using yield management is to strategically assign blocks of spaces to specific price tiers, based upon demand forecast and dynamic pricing structure. Parking space allotment works closely with dynamic pricing to determine the right number of spaces to assign at the right price at the right time. This same strategy is used by airlines and hotels for allotting numbers of seats and hotel rooms to different price tiers; as the lower priced tiers sell out the pricing moves to the next tier until the highest price is reached.
3. Predicting the Future
Is it possible to predict the future? Well, somewhat, when historical customer data is tracked and analyzed, and the findings are then used to reach logical conclusions based on past events and present trends. For example, historical data for past holidays, seasons, week days and weekends, paired with current trends or circumstances gives an operator the ability to make an intelligent forecast for probable parking demand.
Having access to historical customer data and a robust reporting function are both key to prediction ability and are often packaged within an online parking reservation system. When choosing an online reservation system, make sure that you are conscious of the reporting capabilities your business will be able to utilize.
4. How to Get Started
The market is flooded with parking central reservation systems with varying degrees of capability. The best systems will combine reservation software, customer data collection, reporting, dynamic pricing and inventory management all working together to support a solid yield management strategy.
Careful research and investigation for a software provider will take time, but the effort will be worth the reward in the end. The most advanced systems should offer:
- Real-time central reservation system for data gathering
- Omni-channel capability to allow for channel management, reporting and segmentation
- Real-time reporting
- Logical user interface system
- Ongoing research and development
- 24/7/365 online support
If you would like assistance on locating a parking software provider, contact PRS at contact@parkingreservationsoftware.com.
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